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BASF lowers 2008 earnings targets

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11:10 CET+01:00
BASF, the world's leading chemical group, lowered on Thursday its 2008 earnings targets and voiced concern about a possible recession next year.

"BASF will make every effort to match the previous year's excellent earnings," a statement said.

It had previously expected to end the year with slightly better results. The chemical giant maintained its sales target, but was prudent in its declaration, saying it was "based on the assumption that there will be no further adverse developments that cannot be foreseen at present."

Chairman Jürgen Hambrecht was quoted as saying that "the impact of the global financial crisis on the real economy is speeding up and hitting harder. "The economic skid marks can no longer be ignored. The decline in demand in important markets, stockpiling by our customers and the fall in oil prices are all signs of a recessionary trend that is likely to sharpen in 2009."

BASF thus planned to lower production in response to weakening demand. In the third quarter of 2008, the group's net profit fell by more than 37 percent to €758 million ($1.0 billion).

Core earnings before exceptional items decreased by a more modest 8.0 percent to €1.57 billion on sales that gained 13 percent to €15.77 billion.

The Ludwigshafen-based chemical giant had warned a few months ago that its third-quarter results would suffer from the dollar's fall in value against the euro, higher raw material costs and slowing economic activity.

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